The Position of Cryptocurrency Regulation Becomes a Key Factor in Elections
The changing stance of Donald Trump on cryptocurrency and Joe Biden’s regulatory position could impact voters’ sentiments.
As the US presidential election draws near, traditional issues such as foreign policy and culture wars have become the focus of discussion. However, a new topic seems to have emerged that could play a significant role in the country’s elections – Bitcoin (and the entire cryptocurrency market). Let’s take a look at the rise of cryptocurrency in political discourse.
Cryptocurrency and Politics
Just four years ago, discussing Bitcoin in election campaigns by presidential candidates seemed far-fetched. However, there has been a significant change in the landscape during last year’s primaries.
Prominent candidates such as Ron DeSantis, Vivek Ramaswamy, and Robert F. Kennedy Jr. attended Bitcoin conferences, appeared on major Bitcoin podcasts, and incorporated plans to focus on Bitcoin into their campaign platforms.
The real turning point came when President Donald Trump noticeably deviated from his previous stance. He had once dismissed Bitcoin as a threat to the US dollar. However, his current tone is more accepting of Bitcoin. In response to what he described as the Biden administration’s “heavy-handed actions” towards the cryptocurrency industry, Trump announced his support for keeping the industry within the US. Additionally, the Trump administration opened its doors for campaign donations in cryptocurrency.
Current Environment
The strict regulatory stance of the Biden administration towards cryptocurrency has sparked strong backlash from the industry and its supporters. Senator Elizabeth Warren’s condemnation of cryptocurrency has been particularly fierce, leading several major cryptocurrency companies to seek more favorable regulatory environments outside of the US. This regulatory hostility could alienate a significant portion of US voters, especially with the mainstream recognition of cryptocurrencies like Bitcoin.
Hayden Adams, the CEO and founder of Uniswap, urged President Biden to reconsider his government’s stance on cryptocurrency and warned that the current policies could alienate voters. In an article on May 12th, Adams criticized the Biden administration for allowing Senator Warren and the US Securities and Exchange Commission to “launch a full-scale war” against cryptocurrency, implying that Republicans are shifting towards a more cryptocurrency-friendly stance.
Since taking office, President Biden has signed an executive order on digital assets and nominated Gary Gensler as the chairman of the US Securities and Exchange Commission. Under Gensler’s leadership, the commission has increased its enforcement efforts against cryptocurrency companies, leading to criticism of inconsistent enforcement. With significant cases against companies like Kraken, Coinbase, Ripple, and Binance, the government’s stance has faced pushback from the cryptocurrency community, increasing pressure on Biden to adjust policies before the upcoming election.
Voters’ Sentiments
Recent polls show that cryptocurrency policies, particularly regarding Bitcoin, are becoming an important issue for voters in crucial swing states. Political action committees (PACs) supporting Bitcoin and cryptocurrencies have further amplified this shift, investing millions of dollars not only in the presidential race but also in Senate and House races. The level of investment and political engagement from the cryptocurrency community indicates a growing influence in US politics.
With over 20% of Americans owning Bitcoin or other cryptocurrencies, the potential impact on the electoral landscape cannot be underestimated. Trump’s shift to supporting cryptocurrencies can be seen as a strategic move to capture this growing population, especially in the tense polling cycle.
Considering recent presidential elections that were decided by narrow margins, the cryptocurrency voting bloc could potentially sway the outcome of the 2024 elections.
Voters’ Perspectives
Harris Poll conducted a nationwide survey called “2024 Election: The Role of Cryptocurrency” on behalf of Grayscale. Here are some key insights:
Issues of Concern for Voters and Cryptocurrency
Inflation is the top concern for US voters, with economic stability and the ability to pay bills taking precedence over other values such as family, patriotism, and community involvement. This concern aligns with the appeal of Bitcoin, which is often seen as a hedge against currency devaluation due to its fixed supply. Nearly half of the voters are waiting for clearer policies before investing in cryptocurrencies, indicating a need for regulatory clarity.
Acceptance of Cryptocurrency among Younger Generations
Compared to traditional stocks, young voters, especially Gen Z and Millennials, show a significant preference for cryptocurrencies, with ownership rates at 31% and 35%, respectively, compared to stock ownership rates of 17% and 24%. The majority of these young populations believe that “cryptocurrency and blockchain technology are the future of finance,” with 54% of Gen Z and 58% of Millennials expressing this view. Additionally, 68% of voters aged 18-34 would be more likely to invest in cryptocurrencies with clearer regulations, highlighting the importance of regulatory clarity for wider adoption of cryptocurrencies.
Bitcoin and Political Campaigns
The integration of Bitcoin into political campaigns highlights several key trends.
It emphasizes the increasing importance of digital literacy and understanding of technology among presidential candidates.
As digital assets become more intertwined with the economy, candidates who can articulate their potential benefits and challenges in a credible manner may gain an advantage.
Political discussions surrounding Bitcoin and cryptocurrencies may encourage increased regulatory clarity.
When outlining their positions, candidates will need to respond to the industry’s call for clear, consistent, and fair regulations to foster innovation while protecting consumers.
Partisan Differences
While cryptocurrency has received support from both parties, Republicans clearly favor it more. According to Politico, the “first-ever vote on a major cryptocurrency policy bill in Congress” has essentially been shelved in the Democratic-controlled House and Senate. Meanwhile, the most prominent supporters of cryptocurrency currently in office are Republicans, such as Senators Emmer and Lummis.
Critics argue that political support for cryptocurrency often stems from economic interests rather than moral condemnation. However, it is undeniable that cryptocurrency has become an increasingly important political issue. For some, it is a defining issue of our time, representing not only an investment opportunity but also a movement, a philosophy, and a way of life.
For many cryptocurrency supporters, this issue is a matter of life and death; Biden’s next four-year term signifies more enforcement, more regulatory obstacles to actual legislation, and more anti-cryptocurrency rhetoric at the highest political level. The growing animosity towards cryptocurrency from US legislators and regulators during Biden’s term has greatly impacted the global industry.
Recently, EigenLayer, a reconstruction platform hailed as a major innovation in blockchain, faced severe backlash due to a highly restrictive airdrop. Under the current regulatory regime, this was essentially EigenLayer’s only move unless it wants to risk being sued by the US Securities and Exchange Commission.
In this environment, it is understandable why figures like Ryan Selkis, Mike Dudas, and Mark Cuban believe that the cryptocurrency industry must align with Republicans to secure favorable policies. Critics may argue that Donald Trump’s recent support for cryptocurrency is opportunistic and aimed at portraying Biden as an outlier. However, in a situation where the US cryptocurrency industry feels attacked by the government, having prominent figures like Trump willing to support it is a welcome development.
Potential Risks of Politicizing Cryptocurrency
Trump’s embrace of cryptocurrency carries potential risks. In recent years, the digital asset market has experienced significant booms and busts, with major industry participants like Sam Bankman-Fried facing legal troubles. This shift also poses risks for cryptocurrency lobbying groups in Washington. Trump could further politicize digital asset regulation. The industry has spent years and millions of dollars in campaign donations trying to build support across both parties, and this is likely a key legislative goal for cryptocurrency companies.
Conclusion
Fifteen years after Satoshi Nakamoto introduced Bitcoin, it has evolved from a novel digital asset to a significant political issue. As the US approaches its most anticipated presidential election, the role of Bitcoin not only reflects its growing economic significance but also demonstrates its potential to influence policy at the national level.
Whether Bitcoin will become a decisive factor in the 2024 election remains to be seen, but it is certain that cryptocurrency is no longer on the fringes of politics. As we move forward, the dialogue between policymakers, industry leaders, and voters is likely to shape the trajectory of this digital revolution in ways we are just beginning to understand.